Customer retention is a measure of the loyalty of customers, basically, it determines the capacity of a business to keep its customers returning over a period of time. If your business has a high customer retention rate, it implies that a significant number of your customers are frequently choosing your offerings over any other.
Customer retention is 5- 25 times cheaper than acquiring new customers!
Retaining customers is all about keeping your customers engaged with your brand, service, or product so that they don’t lapse and churn. There are several customer retention tactics and strategies that businesses employ to motivate the return of customers.
However, today, we are going to focus on just 7 of them. As you start developing your customer retention plan, you will find that these 7 strategies will ensure the return of your customers.
1. Establish customer trust and foster long-lasting relationships
If you intend to foster customer trust, you need to strategically emphasize every segment of the customer’s journey. In order to develop long-term relationships, you need to incorporate value and relevance into the customer experience. They can be as follows:
- Educating customers on the best parts of using your product or availing of your service.
- Solve customer issues with instant and to-the-point solutions across multiple channels.
- Improve a consistent communication calendar across all channels.
- Make it convenient for your customers by offering them features such as free returns, fast shopping, mobile order and pay, etc.
- Listen & empathize with your customers The practice of listening will increase customer retention. Through listening to customers you will collect customer feedback that will enhance how you deliver customized experiences.
- Most importantly, you can nurture a beautiful, ever-lasting relationship with your customers if you empathize. Genuinely listening to your customers’ issues and feedback, and then implementing them in your business will make them feel valued and increase customer retention to a great rate.
2. Initiate a powerful customer loyalty program
To create an effective loyalty program, the following 3 characteristics must be incorporated to convey much better ROI:
- Offer rewards to your customers that in turn, strengthen your core business goals. In case you want to motivate your customers to visit your business more, or incite more trials or perhaps, more incremental purchases, you need to ensure your program and the rewards offered are structured in a way that will help to achieve your desired results.
- Establish a tiered program where your existing customers who consistently spend more are awarded accelerated earnings to exclusive promotions. Creating awesome benefits for your existing customers will help to increase customer retention.
- Personalizing the customer experience will provide you with the benefit of a lifetime. Individualize the rewards in a way that caters specifically to customers’ interests and preferences to make such offers highly relevant. They will truly feel special.
3. Optimize your customer data
To successfully make your customers keep coming back to your business, your priority is to properly know what they like and how they can be motivated without the need of asking them.
Customer data such as customer service interactions, loyalty program data, and transaction histories will enable you to identify the interests of your customers. Collecting such data and mapping them will help you retain your customers.
4. Using marketing automation to reconnect with your customers
In the age of technology, leverage marketing automation. There are several platforms out there, such as Adzooma, Markopolo.ai, and Madgicx, which can streamline the entire marketing process. One of the integral segments of this process is re-engaging with your customers.
Marketing automation that makes amazing use of Artificial Intelligence (AI) and Machine Learning (ML) can naturally keep track of which customers have diverted. Then through personally relevant content, marketing automation helps to reconnect with them.
5. Calculating Customer Lifetime Value (CLV)
In case you aren’t aware, Customer lifetime value (CLV) is an approximate value of the net profit contributed to your business’s future interactions with a particular customer.
If you have a thorough understanding of CLV, you can switch from a short-term business strategy focused on the profit of the next quarter to a long-term tactic that specifically values ongoing customer relationships.
Calculating CLV is pretty simple. All you need to do is subtract the amount spent on acquiring and retaining a certain customer from the total amount of revenue that customer helps generate.
6. Power of Personalization
There are certain things your customers like. Maybe some of them are into arts and crafts, perhaps, some of them are into comic books or movies. If you intend to market offers and messages, personalize them in order to make them more relevant to your customers.
The following 3 stages are the key to mastering the power of personalization:
Stage 1 - Macro Segmentation: Market offerings to your customers in large segments, dividing them by factors such as demographics and psychographics.
Stage 2 - Micro Segmentation: Contrary to the last stage, market offering in smaller niche segments that combine demographic and behavioral data.
Stage 3 - Personalization: Making customers receive messaging and offers, which are individually personalized for them.
7. Make it Fun with Gamification
Thing is, deep down, there is a child inside all of us. And that child really loves games. The reason for this is gamification helps to motivate the competitive nature of customers and even brightens up the brain’s reward center.
Gamification further reinforces the customer retention program by involving awesome aspects such as badges, leaderboards, points, reward tiers, progress tracking, etc.
The fun fact about gamification is that it is integrated into any interactions your customers have with your business. It could be merely a purchase made, providing beneficial reviews, social sharing, and even trying out newly introduced products.
Customer retention is critical for any foolproof marketing strategy. We hope these pointers assist you in developing meaningful relationship with your customers!
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